Like the residential housing market, the remodeling market is showing signs of improvement, according to two leading industry indexes. The National Association of Home Builders’ Remodeling Market Index (RMI) rose five points in the fourth quarter of 2011 from the third quarter, reaching its highest level in five years. Index components measuring current market conditions and future indicators of remodeling business both increased five points in the fourth quarter. The highest market activity occurred in two categories: major additions and minor additions.
“The residential remodeling market has been improving gradually, mirroring the trend in other segments of the housing market,” says NAHB chief economist David Crowe. “Stringent lending requirements and economic uncertainty continue to be a drag on demand, but we expect a modest growth in remodeling activity to continue through 2012.”
Meanwhile, the Joint Center for Housing Studies at Harvard University also reports that home remodeling spending is expected to increase later this year after a slow start to 2012. If momentum continues to build throughout the year, 2012 could end on a positive note, says Eric Belsky, managing director of the Joint Center. “We’re beginning to see some hopeful signs in the economy, and the housing market is finally starting its slow recovery. That should prove helpful for home improvement spending as the year progresses.”
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